Utah Debt Collection Laws

Since the Fair Debt Collection Practices Act and the Fair Credit Reporting Act were passed in 1978 by the federal government, numerous acts on the state level have been passed to enhance or work with the federal guidelines. They are designed to regulate the debt collection process, and especially to protect debtors from improper and unfair practices. This has been necessary because of the rising number of Americans in debt causing debt collectors to resort to measures that are more aggressive.

Debt Collection in Utah

In addition to The Fair Debt Collection Practices Act and the Fair Credit Reporting Act, Utah incorporates some significant regulations to related debt processes. Any debt collectors must be registered with the Utah Division of Corporations and Commercial Code with a bond of $10,000, to be renewed annually, unless otherwise arranged. A legal loan in Utah can carry an interest rate of no more than 10%, and the judgment penalty rate is the lesser of 12% or the contracted rate. Utah stipulates no rate for usury, but generally, rates significantly above 10% will be deemed void in court. Rates only a small percent over 10% are generally reduced and maintained.

Utah Statute of Limitations

The limit of time placed on raising charges against another party is called the statute of limitations. They vary for every time of law violation and depending on the state regulations. When dealing with debts, the limit begins after the first missed payment, rather than the previously fulfilled payment. In addition, the limits applied to a given case are those of where the contract was created, no matter the residency of those involved. In Utah the statutes are:

  • 4 years: Open accounts (credit cards)
  • 4 years: Oral agreements
  • 6 years: Written contracts
  • 8 years: Judgments by courts of the United States

Collections Practices and Rules for Utah

The federal guidelines for collection practices apply in Utah, in addition to numerous state specifications. Wage garnishment is legal in Utah at the lesser of the federal rate of either 25% or 30 times more than the current federal minimum hourly wage. In addition, specific to Utah, is the limit of wage garnishment to 120 days. Utah courts will not enforce contracts in which both parties were aware of possible illegal means used to recoup missed payments. However, in successful lawsuits for a debtor, compensation for legal fees will be granted in addition to fines of $100 to $5,000.


  • Paying a debt in full directly to the loaning party at any time
  • Combining unfulfilled payments at a interest rate no higher than the original
  • Any changes to an open-end consumer credit contract, if the debtor is notified


  • Granting loans without proper registration (Class A misdemeanor)
  • Discharge of employment by an employer because of wage garnishment
  • Enforcing contracts found to be unconscionable in court

Laws for Debt Harassment in Utah

The major protection for debtors in Utah is provided by the federal regulations of the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. However, penalties for violations are unique to Utah. They hold an equal rate to all other debt collection violations of $100 to $5,000, plus payment to the debtor for legal representation fees.

Utah Debt Negotiation and Settlement Rules

A debt negotiation or settlement is the creation of a new contract to replace the original. With that, the laws that apply to this process are simply the same as those applicable to the creation of a new contract. In Utah, the federal guidelines provide the majority of regulations for this. Debt negotiation for a settlement is an attractive option to many who are in debt. They can result in payment deferrals and reduced payments. However, there are some risks. Many debt settlement companies exist for fraudulently making money from struggling debtors seeking relief. Direct negotiation with the lender is usually possible, and all negotiations will be aided by a debt lawyer to gain various possible benefits:

  • Any anxiety from pending debts is reduced
  • Avoids risk of a lawsuit against the debtor
  • Can often be tailored to account for any unusual financial outlooks

Help from a Utah Debt Collection Attorney

Financial well being is undeniably important, and a debt settlement can often help to maintain or recover a positive status. However, proper and effective debt settlements are not always easy because of intricacies in contract arrangements and any associated laws. Debt settlement lawyers are capable of evaluating any financial situation fairly to find the most useful options available to the individual. They are also useful to ease the process as a whole by relieving the stress of debt collectors' communication attempts, because once hired, the lawyer becomes the sole option for a collector to make contact with a debtor. Persisting collection tactics may be considered debt harassment, which a debt lawyer can also handle.

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